Jiangsu Xiongfeng Electric Equipment-The Transformer Crisis: An Industry on the Brink
2025,04,09
Facing unprecedented lead times and skyrocketing costs, the transformer supply chain crisis threatens the backbone of the electric power industry, driving urgent calls for increased manufacturing capacity and innovative solutions. Can the industry rise to the challenge?
For several years now, the power sector has frantically raised the alarm about an impending transformer supply chain crisis, seeking to reinforce the availability of the component that many consider the backbone of the electric industry. But since the COVID pandemic, the crisis has descended full-blown and grown crippling. In April, global research and consultancy firm Wood Mackenzie warned that transformer lead times have continued an upward trajectory and now stand at 115 to 130 weeks—more than two years—on average. Lead times for large transformers, both substation power transformers and generator step-up (GSU) transformers, have surged to 120 to 210 weeks—or 2.3 to 4 years. At the same time, depending on the size and application, transformer prices have risen 60% to 80% on average since January 2020, driven upward by raw material commodities. Prices for grain-oriented electrical steel (GOES), though significantly volatile, have almost doubled since the pandemic, while copper prices surged upwards of 40%.
“For reference, pre-pandemic lead times ranged from 30–60 weeks, depending on specifications/size and if the transformer had been regularly ordered over time with a proven design (therefore allowing the manufacturing process to be streamlined),” the firm noted. Now, “averages continue to rise quarter to quarter [Figure 1] with no clear signs of relief (i.e., new manufacturing capacity) and the extreme growth of grid-tied renewable projects will keep up a relentless demand for the next decade.”
